I was in Perth last week and spoke with a developer who put it more starkly than I’ve heard it put before. His problem wasn’t that securing a mid-tier builder for a mid-scale residential project was expensive or slow. It was that there was literally no builder available to take the job. Every mid-tier builder in the market was already committed.

That’s not a pricing signal. That’s a hard capacity ceiling and it shows up in the data, not just on the ground. Perth’s housing shortfall has persisted for five years now, a sharp reversal from the oversupply and softening prices of 2018/19. Over that time, Western Australia’s construction cost index has grown 6.7% a year on average outpacing the national rate while the state’s labour market has added over 260,000 jobs and pushed unemployment down to 4.2%, a genuinely tight jobs market by any measure. Put simply: there’s more demand for labour than there is labour, and construction is losing the competition. It has real consequences: costs escalate because there’s no competitive tension in the market to keep them in check; activity slows because projects can’t be resourced or become unfeasible; and completions fall worsening the exact undersupply that’s driving the affordability crisis migration restriction is supposed to solve.

Cutting migration doesn’t fix this. It removes the one lever that could actually add capacity to the pool of skilled labour our housing task needs.

Recent reporting on the agricultural sector’s reaction to proposed cuts to temporary visas for farm workers and backpackers who have become core to Australia’s agricultural workforce- is the same dynamic in a different paddock. Restrict that labour supply and one of two things happens: labour costs rise, or output falls. Either way, the cost of food and fibre goes up, feeding the very inflation driving the cost-of-living pressure that’s fuelling the anti-migration sentiment in the first place. Higher inflation risks higher interest rates, which flows straight back into development costs and household budgets. It’s a loop, not a solution.

Some argue the infrastructure pipeline – including major, responsibly committed defence investment in places like Adelaide and Perth is soaking up construction capacity that would otherwise go to housing. That’s true, and it’s not a marginal effect: multi-billion-dollar defence, LNG and renewables projects across both states are generating high-value jobs that draw on exactly the same trades pool as construction. But the answer isn’t to slow infrastructure we need. It’s to grow the labour pool so we’re not forced to choose between the two.

It’s not only that current settings tighten too far. It’s that they’re being tightened without any real modelling of the consequences. University of Melbourne demographer Peter McDonald has argued that the government’s proposed settings appear to be knee-jerk reactions to reducing net overseas migration rather than being based on careful modelling of labour demand and migration impacts on infrastructure. Construction is one of the sectors flagged as exposed: certain skilled trades in the construction industry could be affected, and the government’s proposed adjustment of permanent skilled visa grants will only touch the surface of that demand. Aged care faces a similar shock, with demand about to expand sharply as the baby boomer generation turns 80 and migrant carers already central to that workforce. Agriculture is bracing for it too — a new ballot system for second- and third-year working holiday visas adds to farmers’ existing anxiety about losing backpacker labour from the horticultural industry.

None of this is an argument to keep settings as they are. It’s an argument that the debate has been reduced to a single dial when the real question is what kind of migration system actually matches labour supply to where it’s needed. We’re seeing the cost of getting that balance wrong in Perth’s mid-tier construction market today, agriculture tomorrow, with aged and health care facing similar pressures.

None of this is an argument for migration without a plan. It’s an argument for being deliberate about what kind of migration we encourage specifically, skilled migration targeted at the trades and construction roles where the shortfall is most acute, and continued access to the agricultural labour that sector depends on. That’s a very different policy conversation to “more versus less,” and it’s the one we should be having.

There’s an obvious objection to everything above: if migrants need houses too, doesn’t more migration just add to the demand side of a problem we already can’t supply our way out of? On the surface, yes – every new arrival needs somewhere to live, which is exactly the maths critics of migration point to.

But this framing treats migrants only as consumers of housing, when they’re also the producers of it. A skilled migrant construction worker doesn’t just need a home – they help build the homes Australia needs. The Perth developer’s problem wasn’t simply too many people chasing too few houses; it was too few people able to build the houses at all. Bring in the right worker, targeted at the right trade, and you add supply capacity, not just demand. The contradiction dissolves once migration is understood as an input to the building task, not only a claim on its output.

This is precisely the logic Australia applied after the Second World War. Post-war migration didn’t just grow the population that needed housing, schools and infrastructure – it supplied the labour that built the Snowy Mountains Scheme, the Tasmanian hydro developments, and much of the housing stock those migrants themselves went on to live in. The nation didn’t see population growth and infrastructure need as competing problems to be traded off against each other. It saw them as the same project: bring in the people and put them to work building the country those people and everyone already here – needed.

We’re facing a moment that calls for similar logic. Australia doesn’t just have a housing shortfall; it has a defence build-out, an energy transition, and a generational infrastructure pipeline running concurrently, all competing for the same trades. The question isn’t whether we take on more people while we’re already stretched. It’s whether we treat this stretch as a nation-building opportunity, and migration as one of the ways we resource it.

Skilled migration targeted at construction and the trades isn’t simply an aggravating factor in the housing crisis – it can also be part of the mechanism by which the housing and infrastructure task gets built. The alternative – fewer workers, the same building task- doesn’t shrink the problem. It means building our way out of it more slowly, at higher cost, for longer.

Australia’s growth has always been migration-led. We’ve faced a labour-constrained, nation-building moment before and answered it by bringing in the people to build it. Facing a housing and infrastructure task of similar scale now, the instinct to close the door rather than open it risks missing that lesson from history.

The housing shortfall won’t be solved by fewer builders, fewer farmhands, and fewer people able to do the work. It will be solved by more of the right people, deliberately targeted at the roles where the country’s growth is actually stuck.

That’s not a slogan – it’s what we’re seeing on the ground, project by project, market by market.